New Power Policy Package Soon

The government would be coming out with a new policy package on power by October-end. The policy would cover tariff, rural electricity and generation and distribution for rural areas.

Stating this at a conference in New Delhi on Wednesday, Union power minister PM Sayeed said that the finalisation of national electricity policy was in an advanced stage and would contain clear cut guidelines for competitive bidding for power projects.

The new policy package will lead to not only expansion of this industry on generation side but also commensurate augmentation on transmission and distribution. It will also lead to a gradual restructuring of the power market which would eventually acquire all the features of competition, said Mr Sayeed.

Planning Commission member Kirit S Parikh, power minister PM Sayeed and power secretary RV Sahi at 7th India Power Forum in New Delhi on Wednesday. FE Photo

The minister said that post-Electricity Act 2003, the interest of power project developers as also of lenders and financiers have revived as so far in 2004, roughly 400 mw of capacity in the private sector have secured financial closure.

In addition, a large number of state-owned utilities have also achieved financial closure and have already placed orders for construction of power plants, said Mr Sayeed adding that project developers and lenders have recognised the features of the Electricity Act and other policy instruments.

Plan Panel member Kirit Parikh said the states should stop providing free power to farmers so that it does not become a norm for others to follow. Instead, the focus of the states should be to provide uninterrupted and quality power for farmers because they are willing to pay for power consumption provided there is a regular supply.